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Pennsylvania online gambling could be ready in November, say analysts

26 Mar 2018

(PRESS RELEASE) -- The Pennsylvania Gaming Control Board (PGCB) announced on 15 March that it will soon begin accepting petitions from state brick-and-mortar casinos seeking to operate their own online gambling sites. The news further solidifies the timeline for the Pennsylvania internet gaming industry and offers clues as to when such online gambling sites might open for business, according to analysts from PennBets, which tracks and analyzes the emerging online gambling and casino industry in Pennsylvania.

Choice of three flavors
Starting on 16 April, the state's land-based casino permit holders will have the opportunity to solicit one of 13 available Internet Gaming Certificates. Operators will have 120 days to submit their application, after which time outside entities may snap up any remaining licenses. Gaming suppliers and manufacturers, such as geolocation technology providers (which restrict out-of-state internet users from accessing the sites), can apply for approval a little earlier, on 2 April.

Regulators have opted to divide online casino games into three categories:
  • Peer to peer games (i.e. online poker)
  • Slot machines
  • Table games
Casinos have the choice of purchasing a certificate to offer all three for $10 million or can choose any vertical of the group for $4 million a pop.

Operators willing to pony up the cash for a bulk license will receive preference and will be the only ones allowed to apply for a certificate within the first 90 days. After that time, and for a period of 30 days, casinos may purchase licenses for their preferred game types piecemeal.

What happens to leftover certificates?
When PA lawmakers passed online gambling legislation last year, they did so with enormous tax rates and fees attached. The high cost of operation will cause many operators to think twice about getting involved in the industry, leaving open the possibility that not all licenses will be sold.

The recent PGCB announcement addresses that potential outcome, stating that "qualified gaming entities" may purchase any leftover licenses after the initial 120-day window closes. While it's unclear exactly which outside entities will be eligible, analysts at PennBets suspect that land-based casinos in New Jersey, like Golden Nugget, or Garden State iGaming operators, like 888, will have a shot at picking up their own permit.

That eventuality could spell trouble for the state's homegrown, upstart online casinos, which would be forced to compete with NJ operators who already hold years of experience in the industry.

Which casinos will get involved?
Only a handful of casinos have made public their plans for online gambling, while others are still weighing the pros and cons of getting into the game. That said, here are the operators who have confirmed that they will participate: Parx Casino, Mount Airy Casino Resort, SugarHouse Casino and Rivers Casino. Harrah's Philadelphia and Mohegan Sun Pocono are also very likely to get involved due to their presence in the NJ online gambling market.

Estimated launch date
"Taking into account the permitting timeline laid out by regulators gives us a much better idea of when we can expect PA online casinos to make their debut," said Adam Small, President and Chief Analyst at PennBets. "Taking the initial 120-day application period into account and adding another 90 days for PGCB approval, we estimate that state iGaming sites could be up and running by November."

The New Jersey Division of Gaming Enforcement had similar terms written into its regulations. For comparison, gaming sites there launched around nine months after the application process began.

"PA will have the benefit of learning from its neighbor's trials and tribulations, and will hopefully launch its online casinos in a smoother and more timely fashion," Small said.
 
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